Collecting Late Rent Fees - Posted by Diane

Posted by derek on December 10, 1998 at 18:11:13:

The sample letter is…

Our records reflect that as a tenant of XYZ Apartments you owe overdue rent and/or late fees or bad check fees totalling $728.00. Please pay the full amount due within seven days of the date of this letter. Please make any check payable to XYZ Apartments and mail it to the above address.

If you have already mailed your payment but it has not yet been received, thank you. Please notify our bookkeeper at the above number.

If we have not received the amount due within seven days of the date of this letter, we will have no alternative but to pursue appropriate action to protect our interests. I trust that no such actions will be necessary.

Please remember that rent is due on the first of each and every month. A late fee of 4% is charged for any rent received after the fifth of the month and there is a charge of $20 for each returned check. We look forward to keeping you as a tenant. However, we have bills to pay and we expect you to pay yours. THank you for your cooperation.

Sincerely, John Doe

That’s it… if the rent hasn’t been received within the 7 days, the lawyer gets the call on the 8th to start the eviction process.

Collecting Late Rent Fees - Posted by Diane

Posted by Diane on December 07, 1998 at 16:54:16:

Most tactful way(s) to collect/enforce late fees?

Re: Collecting Late Rent Fees - Posted by A Miller

Posted by A Miller on December 08, 1998 at 13:26:17:

I save them until the tenant moves and take them out of
the security deposit. Better way is to ask $15.00
too much for the unit and give a discount of $15.00
if rent is paid within 2 days of due date.

Re: Collecting Late Rent Fees - Posted by John Butler(Stl)

Posted by John Butler(Stl) on December 08, 1998 at 09:51:42:

Not exactly the answer to your question, but I use the technique from Carlton Sheets course in my properties with good success. This technique is to give a “rent discount” of $100 as long as their rent payment is postmarked the 4th or earlier. For example, if I have an apartment that I am renting for $400, I advertise it for $400 and then when we are signing the lease, I tell them “I’m sure this won’t apply to you, but ‘technically’ the rent is $500, but as long as your rent is postmarked by the 4th, the rent is $400.” It really gives them an incentive to pay their rent on time.
I figure when I don’t get the rent on time, I have to go into my pocket(even if only temporarily) to make my payments. This extra $100 compensates for the trouble I must go through. This also gets around any state limitations on late fees(since it is really a discount.) However, as always, make sure you consult you local regulations since I know that some states(Mass for example) have stated that rent discounts are the same as a late charge and cannot be over $25.

Hope this gives you some ideas,


Re: Collecting Late Rent Fees - Posted by Brad Crouch

Posted by Brad Crouch on December 07, 1998 at 23:40:07:


Bill Bronchick talks about a method of enforcement that really sounds good to me.

In your lease/rental agreement you need a clause that says that all monies received will first be applied to late fees, with the balance going toward the monthly lease payment.

If the tenant is late and ignores paying any late fees, you will find it hard to evict on the grounds that the late fees were not paid. But by applying the money FIRST to the late fee, that will make the “normal” monthly payment a bit short. Now it’s RENT that is not being paid, and you have all the grounds you need to evict this tenant if they continue not paying the amount due.

Good luck,


Re: Collecting Late Rent Fees - Posted by Vance(Canada)

Posted by Vance(Canada) on December 07, 1998 at 22:05:07:


Please keep in mind I am a relative newbie compared to the experienced landlords out there.

I good system to try, is charge at, or a little above market rents and reward the tenant by rebating say 2% at Christmas time for paying on time the whole year.

Another variation would be to charge $20 above market rent and discount that much if the rent is payed by the first.

These systems are like a built in late fee and you wouldn’t have to go through the bother of sending out letters. If the tennant is going to be late they either lose the rebate or pay the higher rent.


Re: Collecting Late Rent Fees - Posted by Derek

Posted by Derek on December 07, 1998 at 19:26:17:

I simply mail a letter to the tenant assessing them a 4% late fee (State law) on the DAY AFTER the rent is late. It’s always mailed on the day after and I never waive it. After 2 or 3 months of paying late fees I find they don’t do it anymore. Many of my tenants are forgetful college students and late fees and NSF fees have often generated significant extra revenue. We deserve it for the extra effort it takes on our part to collect and remind tenants. As far as tactfulness, I’ve never received too much negative feedback.

Re: Collecting Late Rent Fees - Posted by PBoone

Posted by PBoone on December 07, 1998 at 18:55:04:

I like your use of the term tactful, what we do on the first offense is call to remind them we are not going to impose a late charge since we already have received the payment, but in the future we will have to because of some bogus law. This does two things
1- keeps us in touch with tenants making sure there is not a potential long term problem coming up.
2- Makes the tenant feel as if we are doing them a favor thus creating a sense of loyalty.
What comes up most of the time when a tenant pays late has to do with there scheduled paycheck. if that is deemed the real problem we work something out with them.
We also schedule payments due to us in the middle of the month (15th) this gives us a breather to pay our mortgages on or before the 1st

Re: Collecting Late Rent Fees - Posted by Jim

Posted by Jim on December 07, 1998 at 17:17:58:

I don’t know if you already have a renter you need to collect from, or not. But, if you do not, try this.

Charge say $740/month in rent, due by the 8th of the month. We give the renter the option to pay $725 by the 5th. This way they have incentive to pay on time, and if they don’t, we get a little something extra each month. So, far, this has worked. Try it, and include it in all your leases.
We also say in our leases that if they fail to pay, they go. this is in the priginal lease, and gives us more leverage in court, if and when we ever need to evict. (Which we have not ever had to do…so far)
Of course we are also fairly new to this REI biz.

Re: Collecting Late Rent Fees - Posted by John (KS)

Posted by John (KS) on December 10, 1998 at 08:59:02:

How about sharing what exactly your letter says.

and a variation… - Posted by Mike (KCMO)

Posted by Mike (KCMO) on December 07, 1998 at 18:46:54:

When tenants get used to paying, say $725, they’ll sometimes “forget” to add the late fees when they’re supposed to. How about ALWAYS making them pay the full amount (which includes the late fee) and IF they have paid on time, refunding the extra amount quarterly. Rewarding them for good performance is often a better approach than punishing them for being late.
There are many ways of handling this, so do what you think is best. In your business, you’re the boss!